According to Spencer Stuart’s review of 2021 CEO successions, a significant 63% of CEOs (compared to just 38% in 2020) remained in the board chair role upon stepping down from the CEO position. The firm notes that outgoing CEOs are more likely to stay on as board chair if their successor is internally promoted and as a result of a planned succession process.
A substantial majority of CEO successors were promoted from within (commonly the COO/president role) – 80% in 2021, compared to a 10-year low of 71% in 2020, which was characterized by a record-high percentage (10%) of CEO successors appointed from the company’s board of directors. The firm characterizes board appointees as a common “bridge solution” to facilitate a smooth transition to an internally promoted candidate. In contrast to 2020, no successor CEOs in 2021 were appointed from the board.
The percentage of CEO departures triggered by the CEO’s decision to retire or step down increased 10% in 2021 to 86% from 75% in 2020. Resignations “under pressure” dropped significantly year-over-year from 20% in 2020 to 4% in 2021.
See “How And Why Companies Should Prepare Now For The Departure Of Their CEOs” (Forbes) and additional resources on our CEO Succession page.
This post first appeared in the weekly Society Alert!